NYSE CEO sees 15-20 pct decline in floor brokers

NEW YORK (Reuters) - NYSE Euronext NYX.NNYX.PA Chief Executive Duncan Niederauer said on Monday the New York Stock Exchange’s trading floor population could decline 15 percent to 20 percent by the end of the year, excluding American Stock Exchange staffers.

Duncan Niederauer, Chief Executive Officer and Director of NYSE Euronext, speaks at the Reuters Exchange and Trading Summit in New York May 5, 2008. REUTERS/Brendan McDermid

The ranks of traders and specialists have been thinned by automation in recent years, and NYSE Euronext last year closed down two of its four trading rooms. A fifth room was closed the year before.

“As we roll out more technology and we change some of the rules, it is easier for more of the risk management of the specialist books to be done remotely, so I think they would need fewer people on the floor.” Niederauer said at the Reuters Exchanges and Trading Summit in New York.

“I wouldn’t stand in the way of that, and I could see us just in the main room eventually,” he said.

The trading floor has about 650 license-holders, as well as a couple of hundred non-licenseholders, such as clerical staff, he said.

“Could that go down by another 15 or 20 percent? Sure,” he said. “Is it going to zero? Not anytime soon. Probably never.”

“I don’t plan to close the trading floor. It is not even on my very long list of things to do. I think it’s an important part of our brand and our value proposition.”

Niederauer said in periods of market turmoil, such as occurred in January this year and August last year, having experts on hand was a key differentiator.

“When you get into volatile periods, people want to use the floor more, they want to get experts involved, they want human judgment,” he said.

When American Stock Exchange staffers move in, they will move into two rooms, a small equity trading floor and a small options floor, Niederauer said. NYSE Euronext agreed to acquire Amex for $260 million in stock earlier this year.

Niederauer said roughly 75 percent of American Stock Exchange staffers will likely lose their jobs in the years after the takeover is completed.

“Even though the deal has not closed yet we have been allowed to indicate to people now if there will a job for them at the NYSE after the merger,” Niederauer said.

“We’ve asked people outside that 25 percent (that will be retained) to stay with us during that transitional period,” he said.

Generally, staffing cuts will be across the board rather than focusing on a few particular areas or job levels, he added.